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Investing in the arms trade – is it ethical?

A range of unlikely and diverse organisations still invest in arms companies – including universities and local authorities, even some charities – but does this fit with their mission statements, asks Kaye Stearman

The recent BBC Panorama programme reported that in 2009 the British charity Comic Relief had £630,000 invested in shares in weapons firm BAE Systems. Comic Relief, one of the United Kingdom’s most high-profile charities, would not confirm how its money had been invested since that time. Both the revelations of the charity’s problematic investments, which also included shares in tobacco and alcohol, and the lack of transparency raised huge questions about the ethics of the organisation. The public reaction, especially on social media, has resulted in the chief executive promising a full review of its investment policy.

Before its rethink, Comic Relief insisted that it had to maximise income from investments and therefore ignore any ethical issues that arose. This is strange given that it plainly undermines the charity’s conflict work to invest in a company that profits from conflict. It is also factually incorrect. The Charity Commission has made it clear that an ethical investment policy that sets a charity’s investments in line with its mission is desirable. In fact, ethical funds have outperformed normal funds over the last 10 years due to their focus on long-term results.

The mechanisms behind ethical investment may sometimes be complex but the ethics are clear. The arms industry exists to kill and maim people, to destroy infrastructure and the environment. It is dangerous, destructive, wasteful, corrupt, secretive and shameful. We believe that there is no justification for any charity or non-profit organisation to associate with the arms industry, whether through investment or sponsorship.

Comic Relief cannot claim ignorance of the role of the arms industry. After all, one of its main areas of work is in countries ravaged by conflict, made much worse by the indiscriminate use of deadly weaponry. The arms trade creates and exacerbates poverty and fuels conflict. These weapons have been used against men, women and children around the world. Investments in arms companies are in direct contradiction to the charity’s stated aims.

Here are some concrete examples of that contradiction. Comic Relief work to alleviate poverty in Tanzania. In 2010, BAE were fined £30m for allegedly selling an outdated military air traffic control system to Tanzania, a country without an airforce but with huge social needs. And BAE’s deals with South Africa reportedly had a devastating impact on South Africa’s young democracy. South Africa will eventually have spent more than £8bn on unnecessary weapons, at a time when millions of its citizens living with HIV and AIDS were denied access to lifesaving anti-retroviral drugs.

We know that BAE also supplied weapons to Hosni Mubarak’s Egypt, where Comic Relief has a project working with the victims of conflict. And BAE’ s malign activities go beyond Africa. Its Hawk jets and armoured vehicles were used in Indonesia’s brutal occupation of East Timor, in which 200,000 people were killed. The company has a long history of arms trading with the repressive governments of Saudi Arabia and Bahrain.

The Campaign Against Arms Trade group has long campaigned against charities and public institutions investing in arms companies. In past years, our ‘clean investment’ campaign highlighted the range of organisations with arms companies shareholdings – medical and relief charities, churches, trade unions, universities, health trusts and local authorities. They included groups as diverse as the Girl Guides Association, Great Ormond Street Leukaemia Fund, St Bart’s Hospital in London and Battersea Dogs Home.

Our campaign has had many successes, most notably with churches and charities. In 2001, after a campaign by the CAAT Christian Network, the Church of England redefined its investment criteria and confirmed it would no longer invest in arms companies. In one of the most high profile cases, the British Red Cross – an organisation, formed as a response to the human costs of conflict – was exposed as holding arms company shares. They were soon sold.

However, the arms industry is relentless in its efforts to present itself as ‘socially responsible’. And it has attempted to forge sponsorships with charities. For example, in 2008 BAE entered into a formal partnership 18-month with Sue Ryder Care – a charity whose mission is to support people with life-changing illnesses. Macmillan Cancer Support was the recipient of BAE staff fundraising in 2007-8. In 2009, Marie Curie Cancer Care accepted corporate sponsorship from French arms company Thales, which has a significant presence in the United Kingdom.

Charities and non-profit organisations which develop links with the arms trade are not acting responsibly or ethically. We urge them to take steps to end all such links whether investing or accepting funds, directly or indirectly, and send the arms industry a message – your cause is not our cause, your world is not our world.

Kaye Stearman is media co-ordinator at the Campaign Against Arms Trade pressure group

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